Worried About Running Out of Money in Retirement?

Whether you’re in your 40s, 50s, or 60s, if you’re worried about the size of your pension pot, it may bring some comfort to learn that you’re far from alone.

As reported by Investec Wealth & Investment (UK), “Nearly one in two are worried about running out of money in retirement” with nearly a quarter of people confirming that their income has more than halved since they hung up their boots.

When observing the statistics based on the age of participants, they found that:

● Those aged between 45 and 54 were the most concerned about the size of their pension savings, with 70% of them feeling this way.
● In the under 45 group, 67% shared this concern, with more than half fearing that they’ll run out of money completely during retirement.
● For those living in the North East of England, 61% of us are worried that not enough money has been invested in pension schemes.

Perhaps surprising to some, only 1 in 3 people aged over 65 share these worries, but the devil, as they say, is in the details.

Of the remaining two-thirds of this age group, 43% confirm they have a final salary pension scheme in place. Final salary or defined benefit pensions provide a guaranteed income for life and aren’t affected by financial markets, which may explain why this group is more confident about their retirement income.

Times have changed since then, and where company pensions of this sort used to be fairly common, those of us not working within the public sector are unlikely to have such an agreement in place. So, it’s up to us to ensure we have enough to live comfortably in our later years.

How Much Money Do I Need to Retire?

The value of your pension savings will directly dictate the level of financial freedom you have in retirement. The real question is:

“What type of lifestyle are you aiming for?”

For those looking for early retirement advice, you should head over to our blog, ‘Can I Retire at 55?’ for more information.

There are, of course, different hopes and aspirations for each of us based on the circumstances we face later in life. Hopes of retiring early is one thing, but at the other end of the spectrum, there are genuine fears of needing to work beyond retirement age.

According to the Pension and Lifetime Saving Association, the income required for pensioner couples to lead a ‘moderate’ lifestyle has risen from £34,000 to £43,100 since last year.

To figure out what sum you might need, it would be a good idea to take our free ‘Retirement Readiness Quiz’

Should I Increase My Pension Contributions?

If you can afford it and would like to increase your contributions to give your pension more time to grow in value, remember that this can be done at any time. You simply need to speak with your employer or HR department.

And, if you’re on a defined contribution scheme, your employer may even match your pension contributions.

Remember though, this will mean you’ll have a bigger pension pot once you retire. The knock-on effect will be less take home income each month while you are still working.

How Can I Boost My Retirement Fund?

Firstly, it is wise to determine whether or not this is necessary.

In addition to increasing your pension contributions (as above), you have some other options available to you as well. Have you considered:

• Lost Pension Pots? If you haven’t been keeping tabs on all of your pension pots over the years as you’ve moved from job to job, it might be the case that you’ve saved more than you realise. The Government provides a free service to help you track these pension pots down or you can speak with pension specialists like us at Joslin Rhodes.
• Downsizing or Equity Release? If you own property, you can always unlock funds from these assets. If your home is a little too big, now that your children have long since flown the nest, you could move into a smaller home and take advantage of the profits gained. Alternatively, if you don’t want to move and are over the age of 55, Equity Release might be worth considering.

Joslin Rhodes is Here to Help

If you have concerns about running out of money in retirement, don’t worry. Joslin Rhodes has helped thousands of Teessiders plan for their best life in retirement, and we can help you too!

To learn more about how we can help you, you can book a free slot at one of our Pension Workshop events, visit our Pensions Advice & Retirement Planning or book a free, no-obligation consultation with one of our local Financial Planning experts..

As half of the population is worried about their pensions, you’re certainly not alone in your concerns. With our help, you can soon join the other half.

Joslin Rhodes Pension & Retirement Planning – Real Advice, For Real People